My guest this week is Alex Danco. Alex is a member of the Discover Team at Social Capital, has a background in biology, and has written about all things tech and business. While Alex is only 30, it seems like he has spent decades thinking about all the topics that we discuss, from changing business models, to railroads, to the shift from products to functions, and the rise and fall of asset bubbles. I hope you enjoy this wide ranging conversation.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
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Show Notes
1:15 - (First Question) – A look at his day job on the discover team
2:20 – 40 problems doc
4:27 – How companies get on the list and the turnover
5:21 – Hardest problem they are looking at…housing
11:37 – The investment component that fixes housing
15:35 – Where we are in the technology cycle in the view of abundance vs scarcity
20:54 – Change in distribution and the business vs utility business idea.
28:40 – Bifurcation of small and larger businesses
32:48 – New forms of scarcity today
38:31 – The trend of massive company incumbency
41:07 – The utility of bubbles
49:08 – His favorite bubble
51:18 – Challenges and nuances of bubbles
53:35 – Zero to One Notes on Start-Ups, or How to Build the Future
1:02:22 – Future for VC funding in Silicon Valley
1:04:07 – Advice for business builders
1:08:23 – The Three True Outcomes
1:13:04 – His background in biology and innovation in that space that is coming
1:19:46 – Company examples that are of interest to him and that encapsulate his way of investing
1:24:56 – Kindest thing anyone has done for Alex
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guest this week is Keith Wasserman, co-founder of the real estate investment firm Gelt.
This was my first fully dedicated conversation on direct real estate investing, so we cover many different topics, including the pros and cons of different types of real estate, current valuations, risk vs. reward, tax protection, and the most interesting emergent areas.
You can tell Keith is an entrepreneur at heart so I enjoyed his energy and all that he has learned. Please enjoy.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:15 - (First Question) – Their interest in apartments and mobile homes as investments
2:32 – The returns spectrum for different classes of real estate
4:03 – His early entrepreneurial ventures and the start of Gelt
7:45 – Don’t be afraid of negotiating
8:34 – Going through early deals in real estate
11:57 – How he determines when it’s time to sell a property
14:13 – How do they think about taxes in their investment offerings
16:57 – Depreciation strategies in real estate investing
18:27 – The evolution of the types of real estate properties they’ve invested in
21:41 – Most important factors when evaluating a building to invest in
23:50 – Barriers to entry
25:41 – Changes in his cost of capital
28:51 – Cost of debt and deciding how much to put into a building
30:33 – A look at the competition
34:51 – Effective marketing strategies
37:07 – How demographics impact their strategies
39:11 – The co-living space
40:34 – Cloud kitchens and how he would invest in these
46:11 – How autonomous vehicles will impact real estate
47:52 – Pros and cons of developing new properties vs buying existing ones
49:59 – Early stage investing interest
53:48 – Favorite business/entrepreneur story
55:10 – Advice for younger entrepreneurs
57:09 – Kindest thing anyone has done for Keith
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
My guest this week is Alex Mittal, co-founder of Funders Club. Following past guest Jeremiah Lowin, Alex is my second elementary school friend to appear on the podcast—a trend I hope continues.
Funders club is a unique venture firm, because it is build around a network of investors and entrepreneurs who submit deals for consideration and invest together. But as you’ll hear, Alex and his co-founder Boris aren’t just building an open platform for early stage investing: they also then take a very traditional venture approach, making investing decisions themselves when it comes to building a centralized portfolio.
Our conversation is about what Alex has learned investing in almost 300 early stage companies over the past 7 years.
Please enjoy.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:30 - (First Question) – Inception of the Founder’s Club
1:36 – Jeremiah Lowin Podcast Episode
3:59 – How the process of their platform works
5:40 – Role of the network in Founders Club setup and success
8:26 – What he has learned from all of the data he has access to
16:00 – Early stage investing and finding the sweet spot
22:17 – What makes a really intriguing bad idea
25:23 – Why he remains so excited about Ethereum
31:18 – More bad ideas
31:55 – Apoorva Mehta on How I Built This Podcast
37:15 – Thoughts on retail and logistics and how they fit his Venn diagram of boring and crazy
43:13 – Chip and electronic design
45:47 – Companies that are not just increasing efficiencies but actually making foundational changes
45:54 – Energy and Civilization: A History
52:34 – What does he look for in founders
55:26 – Pivot or Fail
57:05 – Kindest thing anyone has done for Alex
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guest this week, Eugene Wei, has one of the most interesting backgrounds of anyone I’ve had on the podcast. He worked at Amazon early in its life, was the head of product at Hulu and Flipboard, and head of video and Oculus.
Our conversation is about the intersection of technology, media, culture. We discuss Eugene’s concept of invisible asymptotes: why growth slows down (for both companies and people) and how some can burst through. I’d list more of the topics, but we covered so much that you should just listen.
Finally, I’ll say that after spending a day with Eugene (including a wildly interesting dinner with Eugene, past podcast guest Sam Hinkie, and future podcast guest Kevin Kwok) that he is the type of uniquely interesting and kind person I am always searching for and one that I wish I could bet on somehow. If you know more people like this, reach out and suggest them for this podcast. Now, enjoy our conversation.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:38 - (First Question) – Idea of cuisine and empire
1:52 – Cuisine and Empire: Cooking in World History
4:20 – Key takeaways from the Defiant Ones Documentary
8;25 – Being convinced to buy a sports coat
11:10 – The concept of invisible asymptote
17:43 – How the medium shapes the messaging and the impact of cameras everywhere on society
17:48– Invisible asymptotes
17:56 – Selfies as a second language
22:57 – Proof of work in building a social network
32:51 – Magnification of inequalities in digital networks
34:01 – The Lessons of History
36:47 – His thoughts on the media industry’s impact on society as a whole
39:42 – His time at Hulu
44:48 – Places where video could replace text
47:30 – The need for media for any business looking to grow
49:35 – Amusing Ourselves to Death: Public Discourse in the Age of Show Business
53:08 – Personal asymptotes
57:19 - Habit building and goal setting
1:00:29 – Travel recommendations
1:03:24 – Movie recommendations
1:08:16 – Product recommendations and what makes them indispensable
1:10:44 – Creation: Life and How to Make It
1:13:23 – Thoughts on the art of conversation
1:14:59 – The Most Human Human: What Artificial Intelligence Teaches Us About Being Alive
1:18:30 – Kindest thing anyone has done for Eugene
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guest this week is Michael Duda, and the topic of our conversation is the role that brand plays in business and investing. Michael has worked on and invested in a wide-range of brands including Birchbox, Casper, Harry's, Citibank, DirecTV, Google, TripAdvisor, Under Armour and vineyard vines. His background in advertising made this a unique and interesting conversation. please enjoy.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:11 - (First Question) – Mission of Bullish
2:15 – Typical relationship they have with companies
3:01 – Defining brand
4:35 – Ryan Caldbeck Podcast Episode
5:51 – A dive into how brands make people feel
7:54 – Does the emphasis on brand still matter to consumers and if so, where
10:01 – Process of building up a brand
14:53 – What has changed most in the planning of a brand strategy
18:35 – How does his thinking impact his investing strategy
21:48 – Where does he differ from the rest of the market
23:34 – Advice he would give to companies in general
26:18 – How advertising has changed in the current landscape
28:35 – The screening process for picking potential investments
35:16 – How they analyze valuation
37:31 – Unusual traits he likes in founders
40:12 – Categories most ripe for young companies to disrupt
44:03 – Most interesting marketing channel for direct to consumer businesses
46:45 – Marketing piece he is most proud of
49:23 – Companies that embody the best of what has been discussed
52:31 – His love for people in business
53:41 – Kindest thing done for Michael
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
Over the summer. I spent time with Abby Johnson, who is the chairman and CEO of Fidelity Investments and several other business leads at Fidelity to understand how a very large firm like theirs is navigating change in our industry. What follows is a condensed version of my various conversations with Abby and her team. We discuss the big buzzwords like blockchain and machine learning, but also thoughts on leadership, client centricity and measures of success.
I hope you enjoyed this exploration
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
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Show Notes
1:16 - (First Question) – [Abby] A look at the early part of Abby’s career
2:45 – Analyzing the skill of capital allocators
3:27 – A look at the asset management world of today and what to focus on today
7:23 – A set of decision-making principles that guide Abby
12:55 – Their strategy around the digitization of the world
16:07 – Balance between robo-advisors and humans and the markers of a good relationship
18:24 – What is the future of the role of the human in these relationships
20:15 – Their interest in emerging technologies like Blockchain
24:50 – Will crypto be its own asset class in the future
25:58 – [TOM] State of the business and the most interesting points of change
28:14 – Who is winning the battle for the next generation of investors
29:24 – How much of the change in financial business is cyclical
30:17 – What are businesses doing right to bridge that generational gap
31:01 – What does the future of the asset management industry look like
32:13 – What technologies could impact the asset management business the most
33:44 – The difference between machine learning and AI in this format
35:26 – In what way will AI impact these processes and replace humans
36:41 – What has him most excited about the future
37:54 – Advice for people thinking about pursuing a career in financial services
39:20 – Markers of a business that would be attractive for the next generation to consider working for
40:33 – The importance of brand when thinking about their business and those they work with
41:57 – Ways of engendering trust from a branding prospective
43:20 – Kindest thing anyone has done for Tom
44:28 – [VIPIN] Building a team around AI
45:21 – Markers for a good data strategy
47:25 – Kindest thing anyone has done for Vipin
48:58 - [ABBY] – How Fidelity thinks about data as an investing initiative
50:24 – Differentiating attributes of good analysts and if they’ve changed
51:34 – Investor she has always enjoyed learning from
52:37 – Favorite Peter Lynch story
53:17 – Business lessons that people could take away from Abby
54:59 – The role of women in financial services and what can be done to improve the situation there
57:35 – Trends that Abby is most excited to explore
1:00:22 – Positives and negatives of being part of a family business
1:01:46 – Kindest thing anyone has done for Abby
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guest this week is Keith Rabois. Keith is currently an investment partner at Khosla Ventures, but has a storied and diverse background as an investor, entrepreneur, and executive. He has worked in senior positions at Paypal, LinkedIn, and Square; has led investments in companies like Stripe, YouTube, Palantir, and AirBnB; and started the company OpenDoor, which aims to transform the process of selling a home through technology.
One fun fact about Keith is that he may have the most impressive list of bosses I’ve ever seen, which we discuss during the episode.
We cover a lot, but one thing we kept returning to was business strategy. Keith’s frameworks for gaining and building strategic power helped me clarify my thinking on the topic, and his examples of contrarian thinking will hopefully make you question some commonly held beliefs.
Please enjoy our conversation.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:35 (First Question) – A look at his investing philosophy
3:16 – Favorite examples of his own investment history
4:40 – 7 Powers: The Foundations of Business Strategy
5:07 – Understanding what is anomalous in a given investment
7:07 – How much a secret needs to be protected within a business
11:51 – Why accumulating advantage with data is of interest to Keith
15:12 – Digital health companies and ideas that he finds compelling
16:17 – Nuance around financial services that investors should be mindful of
17:56 – How do they evaluate managers ability to recruit talent
19:36 – How similar are the roles of entrepreneur, board member, investor, etc that Keith has had in his career
24:02 – Ways that Keith is a contrarian, including his feelings on “lean startup.”
27:04 – Is problem identification a specific skill set
28:29 – Objection with experimentation/iteration
30:02 – Bad ideas in venture
31:36 – What he likes about Apple
31:51 – Creative Selection: Inside Apple's Design Process During the Golden Age of Steve Jobs
32:26 - Interview questions for identifying great talent
35:41 – Elements of good design
37:14 – Impact of platforms on opening new opportunities
38:42 – His take on valuation in the early stage environment
40:33 – Advice he would give people early in their careers
43:58 – Do high growth companies get beat by established larger businesses
45:25 – Popular narratives that he thinks are just wrong
48:22 – His thoughts on how people should learn, balancing experience vs information gathering
50:00 – Other investors that are taking a unique approach to investing
51:57 – Reflecting on the entrepreneur as a client model of private equity
55:04 – Books that he recommends that is least known
55:18 – The Upside of Stress: Why Stress Is Good for You, and How to Get Good at It
56:30 – Kindest thing anyone has done for Keith
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guest today is Bryan Krug, who manages the Artisan Partners Credit Team and overseas more than $3B in high yield credit investments for the firm. This was my first conversation on high yield, so I took it as an opportunity to get an overview on the investment universe and home in on the tools used for analysis and security selection.
As an equity investor, I think one of the most fruitful areas of research is into ways that companies fail or go wrong, and credit investors focus almost entirely on this potential for impairment. My guess is that all equity investors will learn something useful from this conversation. Please enjoy.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
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Show Notes
2:11 – Overview of the high yield debt markets
5:05 – Why should investors consider this investment class
7:11 – How analyzing a company’s debt is different from what equity analysts look for
8:42 – Primary factors when exploring a company’s ability to de-lever
9:43 – What is their alpha vs others in the space
12:02 – Deep dive into the quantitative factors for them to look into a deal
14:25 – Benchmarks he uses
16:08 – Portfolio construction
17:15 – Their preference for broadband providers over cable tv networks
20:01 – What piques his interest about spreads
21:50 – The ratings of debt
25:40 – A recent example of an opportunity and how the mispricing was identified
29:17 – Most valuable data sets in this world
31:51 – Favorite part of this process
32:26 – Most surprising new learning
33:01 Maintaining your advantage
34:49 – The biggest pools of error in this industry
48:00 – What industries interest Bryan
40:50 – Dedication to this market
41:45 – Evolution of his healthy skepticism
42:38 – Can things in the debt market help to project what will happen in the equity markets
44:56 – Current view of the world based on what is happening in the credit markets
45:51 – Categories of convenience that he cares about
49:15 – Anything that has him worried in high yield markets
50:38 – Kindest thing anyone has done for Bryan
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
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My guest this week is Maureen Chiquet, the former longtime CEO of Chanel. Maureen also spent much of her career at the Gap, growing Old Navy from scratch, and serving as the president of Banana Republic.
The topic of discussion is her experience running large businesses and of finding one’s way in a career and as a leader of others.
I hope you enjoy this unique conversation and that it encourages you to, among other things, travel somewhere new and interesting in the coming year.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:15 - (First Question) – The importance of being able to put yourself in other people’s shoes
3:05 – Scott Norton Podcast Episode
4:36 – Most memorable sale from her early career
5:03 – The intersection of facts and emotions in sales
6:40 – Most important emotions in business
7:30 – The importance of identity as part of the selling/marketing of sales and products
9:10 – Difference in strategy for luxury brands vs others
9:21 – The Luxury Strategy: Break the Rules of Marketing to Build Luxury Brands
10:55 – Striking a balance between tradition and innovation
13:46 – Advice for new brand company related to rarity
14:59 – Importance of being organic with your brand purpose
15:01 – Wild Company: The Untold Story of Banana Republic
16:26 – Maureen’s purpose over the years
18:44 – How to harness your purpose for your job
20:53 – Her process for writing and desire to do TV
24:01 – Her time with Micky Drexler
27:40 – As a leader, guiding people to succeed.
32:33 – Strategy for shifting culture at a company
37:54 – The importance of courageous conversations we should all be having
43:45 – Markers of courageous conversations
46:43 – How she thinks about introspection
50:12 – What draws here to certain locations
55:15 – Advice for younger people starting out their career
57:11 – Kindest thing anyone has done for Maureen
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
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My guest this week is Hunter Walk, the co-founder of Homebrew, a unique venture capital firm. Hunter is a tool builder, having spent his career before venture at companies like Google and YouTube. The topic of our conversation is the intersection of creative expression, technology, human behavior, and problem solving.
We discuss his time at the company behind the video game Second Life, building tools for creators at YouTube, and why a very hands-on style of early stage venture investing represents an interesting use of his skillset at this stage of his career.
Please enjoy my conversation with Hunter Walk.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:24 - (First Question) – Background on Second Life and what role Hunter had there
6:10 – The virtual currency system at use in Second Life
9:51 – Measuring how people behaved in this virtual world
12:21 – How closely is the Second Life world mimicking real life
15:13 – The market for platforms that lets people take on creative ventures
17:58 – Investments that interest Homebrew
20:21 – Lessons learned while working at YouTube
28:34 – The idea behind Homebrew
33:44 – How to best describe good problems to solve for
36:10 – The Shadow economy and investing in companies operating there
42:17 – Monetization of attention
47:22 – His interest in fintech companies
54:03 – Major trends of change he’s observed over his first three funds
1:04:13 – What is there take on the state of returns for VC’s
1:09:52 – What is the most common way that founders need help and what advice is more helpful
1:14:35 – Kindest thing anyone has done for Hunter
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
[REPLAY]
Modern Monopolies: What It Takes to Dominate the 21st Century Economy, which explores the platform business model (Uber, Airbnb, Github). Alex is also the founder and CEO of Applico, a company that he started in his dorm room that is since grown into a huge enterprise that helps startups and Fortune 500 innovate with platforms. Alex and I talk about history and future of businesses and different types of business models. There’s a lot in here for investors, entrepreneurs, and historians. Please enjoy!
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
Books Referenced
Modern Monopolies: What It Takes to Dominate the 21st Century Economy
The Systems Bible: The Beginner's Guide to Systems Large and Small
The Master Switch: The Rise and Fall of Information Empires
Zero to One: Notes on Startups, or How to Build the Future
Links Referenced
Show Notes
2:39 – (first question) – Exploring the history of business models from linear to platform.
5:46 – A look at the share of overall business platform companies have taken over
7:06 - Modern Monopolies: What It Takes to Dominate the 21st Century Economy
7:48 – The potential for platform businesses over the next 20 years
9:18 – Detailing the difference between a linear and a platform business
12:08 – Exploring transaction costs and core transactions across different business models
19:49 – Is the platform business model good for investors and VC’s since so many can get crushed when there’s a sole victor, or is it just for the founders and entrepreneurs.
24:35 – How the self-driving car is going to deliver more opportunity for consumer consumption
27:15 – Untapped supplies as the opportunity for new platforms and where we could see new openings
30:24 – How consolidated will things become across all platforms
33:16 – How do platform companies create a moat to keep others from replicating their business strategy
37:03 – Are there platform strategies that specifically don’t work
37:40 - Failed Color App
38:45 – Why complex systems typically don’t scale up and you should think small and easy to get started
38:47 – The Systems Bible: The Beginner's Guide to Systems Large and Small
40:02 – How the origin of so many larger companies started out small and localized, and why it makes investors more comfortable
41:37 – How Alibaba had to tweak their business model to accommodate the Chinese market
44:07 – Why are the modern monopolies better for consumers
47:52 – Exploring platforms that are asset heavy
49:00 – What do you look for as a VC to determine
52:05 – Alex’s take on whether a platform based company like Uber should be more asset heavy
54:31 – Exploring some lesser known platform businesses that Alex finds interesting
56:18 – If there is a demand in the secondary markets for a product, why don’t the primary suppliers simply raise their prices
57:03 – What Alex’s portfolio of platform-based businesses would look like
58:48 – A couple of most influential books Alex has read
59:12 – The Master Switch: The Rise and Fall of Information Empires
59:38 – Zero to One: Notes on Startups, or How to Build the Future and other Peter Thiel books
59:53 – Looking at Applico, how it started and how it become so focused on the platform business model
1:03:56 - Most memorable day for Alex
1:05:13 – Kindest person to Alex in his life
1:06:10 – What platform opportunities could exist in the financial world
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
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My guest this week is Cliff Asness, the managing and founding principal at AQR Capital Management. 20 years after its founding in 1998, AQR manages $226 Billion dollars across a number of quantitatively based investing strategies.
Cliff was an original quant researcher and he has long been one of the financial writers and thinkers that I look to for education and for inspiration.
I distinctly remember reading one paper in particular—value and momentum everywhere—somewhat early in my career and thinking: this is the kind of research I want to do forever.
You can always tell when talking to Cliff or hearing him speak that he just loves researching markets. There is a deep intellectual honesty in his work, and a respect for thinkers at different ends of the market spectrum, from Gene Fama and Ken French, to Jack Bogle, to Dick Thaler and Robert Shiller.
Our conversation is about all things quant—past, present, and future. Cliff touches on many of the big issues facing quant investing and tells some great strong along the way. I hope you enjoy our discussion. Let’s dive in.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:47 - (First Question) – Favorite superhero
2:43 – Why ‘Ka nama kaa lajerama’ is part of his twitter profile.
3:38 – How portfolios have shifted the way they use factors in a portfolio
10:15 – What are good questions clients are asking right now
13:24 – Contrarian Factor Timing Is Deceptively Difficult
15:40 – Does technology impact investing strategy
22:14 – When to share information vs keep it proprietary for clients sake
26:40 – How their research process is governed
31:14 – How they will incorporate machine learning into their process
34:21 – What they will do when red flags show up
37:01 – Wackiest question from a client
41:47 – The Three Sharpe Ratio Strategy
41:53 – Liquid Alt Ragnarök
48:10 – Does his thinking change when it comes to asset allocation vs portfolio building
50:17 – Parallels Between the Cross-Sectional Predictability of Stock and Country Returns
53:01 – Sin a Little
57:14 – Trends in fees and pricing
1:02:43 – Thoughts on private equity markets
1:11:03 – Common attributes of really good researchers
1:13:21 – What is he most curious about right now
1:15:43 – What excites him outside of finance
1:17:00 – How much he discusses his work with his kids
1:18:35 – The Devil in HML’s details
1:19:36 – Kindest thing anyone has done for him
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
[REPLAY]
My guest this week is Peter Attia, M.D., whose mission is to understand and improve human lifespan and healthspan (or quality of life). Reading Peter’s research, you find that there are many similarities between health and investing—ideas like compounding—which we explore in detail.
We spend a lot of time on mind, body, spirit and performance as it relates to living a better life. Of particular interest is the strategic problem that we face when studying longevity. As Peter puts it in our conversation: we are the species of interest, but we can’t conduct the kinds of experiments on humans—randomized trials, with control groups—that we apply to solve other big problems. So we have to back our way into a better understanding of longevity and quality of life.
To that end, we discuss what we can learn from studying centenarians, the problem of progress in science, a drug called Rapamycin (which Peter believes could be revolutionary), eating, the importance of muscle mass, and the idea of distressed tolerance. We emerge with a framework for thinking about health and well-being which can hopefully help us all live longer, better lives. Please enjoy!
For comprehensive show notes on this episode go to http://investorfieldguide.com/attia
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
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Posts From Peter Attia That You Should Read
How You Move Defines How You Live
Long List of Questions Answered: Part 1 and Part 2
Links Referenced
The Scientific Method-Richard Feynman
Knowing Versus Understanding-Feynman again
Books Referenced
Barbarians at the Gate: The Fall of RJR Nabisco
Show Notes
2:31 – (first question) – Getting Peter to define the concept of wealth and how it might have changed in his life
5:01 – How do you increase the number of really good people in your life.
6:50 – Looking at the relationship between healthspan and lifespan and a chart that Peter created on this specific topic.
11:11 – Drilling down into the different dimensions and aspects of this chart that could be most important for people, especially how compounding plays into our health.
16:57 – The difference between strategies and tactics that will help you extend lifespan
17:54 – The Scientific Method-Richard Feynman
21:41 – Different types of intermittent fasting
28:59 – What role does repair play in health
34:17 – Barbarians at the Gate: The Fall of RJR Nabisco
36:01 – Looking back, what health trends today will look absurd
36:19 – Diffusion of Innovations
39:24 – What are the primary benefits of weight lifting
40:21 – The importance of glucose disposal
45:07 – Good Calories, Bad Calories
46:31 – What is the state of progress in the scientific community
52:14 – Peter is asked about how he guards against getting too attached to old beliefs
1:01:51 – A look at how performance relates to healthspan
1:03:34 –Peter’s first great auto-racing experience
1:09:17 – Looking into Peter’s medical practice and understanding his thinking that goes into helping people
1:18:11 – The most memorable day in Peter’s career
1:22:31 – The kindest thing anyone has done for Peter
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
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My guest this week is Ryan Caldbeck, a private equity investor who wants to bring quantitative rigor to the private markets. Ryan is the CEO of Circle Up, which uses a system it calls Helio to identify attractive investments in early stage consumer brands.
While I am of course a fan of quantitative investing, I also know from experience how much harder private markets are than public markets when it comes to the transactions themselves. We discuss this and many other potential roadblocks to bringing models to private markets.
Using many individual companies as examples, Ryan explains some of the major predictive factors they’ve uncovered in their research. We also discuss which parts of the private markets might be infiltrated by quant processes first, and which may never be.
I expect many more to go on a journey similar to Ryan’s in the years to come. They serve as an interesting example for ambitious investors out there.
Please enjoy our conversation.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:39 - (First Question) – Formation of Helio
6:57 – How they handle the relationship building needed to make investments in private markets
10:26 – Why consumer and retail are interesting spaces to apply their quantitative approach in private markets
12:54 – Searching for new relevant data
16:14 – How do they stay ahead of the commoditization of uniqueness
16:21 – Pattern Recognition and Machine Learning
17:24 – Sam Hinkie Podcast Episode
18:00 – Dominant predictive factors in this world
21:05 – Which is more important, relative value or rate of change
21:48 – What does the data say about online sales vs offline (being in a store)
23:30 – Variable that consumer investors think matters but it doesn’t
24:53 – Valuing companies and accounting for mispricing’s
25:36 – Michael Recce Podcast Episode
26:41 – Goes through the process using Liquid Ivy as an example
28:46 – Most interesting sub-categories
29:33 – Future for this model
32:10 – Albert Wenger Podcast Episode
35:19 – Other categories outside consumer and retail interest Ryan
36:28 – Biggest challenges for CircleUp as a business
38:46 – Handicapping their earnings expectations
41:36 – Take on the VC/PE landscape
43:03 – The types of models that are most interesting to the team
45:05 – Quantitative elements of brand that are most interesting
47:30 – Most unique brand and distribution strategy he’s come across
53:27 – Who has influenced Ryan the most
54:37 – His personal values
55:51 – More people who had an influence on Ryan
56:05 – The Innovator's Dilemma: The Revolutionary Book That Will Change the Way You Do Business
57:07 – Thoughts on goal setting at the company
59:29 – Unchangeable factors that shape their long-term vision
1:02:01 – Most interesting individual conversation as part of this journey
1:04:02 – If he could only keep one dataset, what would he keep
1:05:09 – kindest thing anyone has done for Ryan
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guest this week aspires to be the Larry David of investing, and we discuss why. Howard Lindzon is hard to categorize. He’s primarily an early stage investor right now, but he’s participated in all types of investing. He describes himself as a trend follower and always has a unique take on popular topics.
In this conversation, we cover his investing history and his take on the fintech investing landscape. What I’ll remember most is the idea that we should focus on what is happening versus what we think will happen or might happen. There is a Peter Lynch like quality to some of Howard’s thinking, and a willingness to embrace the weird that I find very appealing. The few times I’ve met Howard, I’ve smiled or laughed most of the time, which is about as nice a thing as I could say about someone.
He’s a good example of why I like this podcast format. His investing style bears literally no resemblance to my own, but it got me thinking about a lot of new things. I hope you enjoy our chat.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
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Show Notes
1:42 - (First Question) – Why he wants to be the Larry David of investing
2:00 – Why his investing style is best described as trend following
4:05 – The biggest inspirations/influencers on Howard’s investing
6:39 – What made his second mentor, Fred Wilson such a great investor
9:52 – Formation of Wall Strip
12:33 – Why weird is so important in his investment philosophy
14:56 – Understanding his investment philosophy through his investment in Rally Road.
21:02 – His assessment of the fintech space
28:54 – Why fintech pushes away from human nature
30:50 – Major trends in fintech that have his attention
35:02 – What stands out about the teams at these companies he invests in
36:37 – Thoughts on fractionalization plays
36:44 – Capital Allocators podcast episode
36:54 – Venture Stories Podcast
40:03 – Any major trends that are changing and worth attention
42:06 – The Tipping Point: How Little Things Can Make a Big Difference
43:26 – His take on the media landscape
45:10 – Kindest thing anyone has done for him
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guests this week are Ali Hamed, Brian Harwitt and Marc Porzecanski who work together at CoVenture Credit. When I first had Ali on as a podcast guest, we discussed the many aspects of what his firm does, ranging from venture, to crypto, to credit. We glossed over the lending side of the business, but having since learned a lot from them on the topic, I was excited to get the chance to talk with members of their credit team for today’s longer exploration of esoteric high yield lending.
I am always proselytizing the value of investor education, s this week we have a podcast first. The CoVenture team has prepared a long series of posts that correspond to our conversation and go even deeper into the topic of credit investing. You can find them in the shownotes at investorfieldguide.com/credit
This is entirely differently from any conversation I’ve shared before, so I hope you learn as much as I did. Please enjoy my discussion with team CoVenture Credit.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:42 - (First Question) – The formation of their unique credit business
7:09 – Their advantage in seeing both the equity and credit side of their investments
10:23 – Looking at the Returnly deal as an example
14:07 – How they view these deals and are able to sustain them as long-term investments
18:09 – Their interest in payroll deduction lending
20:08 – Finding unique types of default risk
21:31 – What stands out in a platform that makes CoVenture want to take a deeper look
26:43 – Most interesting types of problem they have come across that they have yet to do a deal in
31:35 – What is going to change to make for more thoughtful underwriting of subprime lending
35:51 – Major structures of asset backed lending
39:49 – Whether the home serves as an interesting playground for credit opportunities and whether people will own anything again
42:44 – Mark’s experience working at a huge firm vs his experience at CoVenture
44:31 – How does the current credit cycle impact their view
47:04 – Lending against bitcoin
50:06 – Who is interested in these loans against bitcoin
50:57 – How to set interest rates against a weird asset like this
53:00 – What are the key determents of success in this business
1:02:27 – Kindest thing anyone has team for the team
1:03:52 – How to treat people that you pass on
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guest this week is Saifedean Ammous, author of the book the Bitcoin Standard. This was one of the more interesting conversations I’ve had in the world of cryptocurrency, primarily because we don’t talk about Bitcoin or Crypto until 25 minutes into the talk. Instead, we focus on history, economics, sound money, low time preference, and gold—all interesting topics.
Saif’s thinking on cryptocurrencies other than bitcoin—which is that they are worthless—is unique and thought provoking. His reasoning around why gold shouldn’t be compared to the returns generated by assets like equities was also compelling. If you’ve followed my Hash Power episodes, this is a new a differentiated interpretation of Bitcoin as a technology for the store of value use case. Please enjoy our conversation.
Hash Power is presented by Fidelity Investments
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
2:10 - (First Question) – Explain Sound Money
4:25 – Examples of hard vs easy money
7:36 – the even money trap
9:36 – The benefits of hard money vs today’s standards
14:05 – Why this interests him
14:16 – Gold Wars: The Battle Against Sound Money As Seen From A Swiss Perspective
14:56 – Democracy – The God That Failed: The Economics and Politics of Monarchy, Democracy and Natural Order
16:17 – Correlation between time preference and people’s ability to succeed in life
19:59 – How money markets worked in the late 18th century vs today
27:57 – How he came across Bitcoin and how he thinks of it as a digital gold
35:42 – How will the world transition to a sound money standard
42:15 – The impacts of hyperinflation on crypto currencies
45:04 – The idea of a orderly upgrade of the world currency
48:20 – His thinking on alternative coins
54:05 – What it takes to compete with bitcoin
1:01:43 – How he diversifies
1:04:35 – Stalling bitcoins demand
1:06:11 – Does he apply his thinking of lower time preference elsewhere in his life
1:07:09 – Kindest thing anyone has done for him
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guest this week is one of my best and oldest friends, Jeremiah Lowin. Jeremiah has had a fascinating career, starting with advanced work in statistics before moving into the risk management field in the hedge fund world. Through his career he has studied data, risk, statistics, and machine learning—the last of which is the topic of our conversation today.
He has now left the world of finance to found a company called Prefect, which is a framework for building data infrastructure. Prefect was inspired by observing frictions between data scientists and data engineers, and solves these problems with a functional API for defining and executing data workflows. These problems, while wonky, are ones I can relate to working in quantitative investing—and others that suffer from them out there will be nodding their heads. In full and fair disclosure, both me and my family are investors in Jeremiah’s business.
You won’t have to worry about that potential conflict of interest in today’s conversation, though, because our focus is on the deployment of machine learning technologies in the realm of investing. What I love about talking to Jeremiah is that he is an optimist and a skeptic. He loves working with new statistical learning technologies, but often thinks they are overhyped or entirely unsuited to the tasks they are being used for. We get into some deep detail on how tests are set up, the importance of data, and how the minimization of error is a guiding light in machine learning and perhaps all of human learning, too. Let’s dive in.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
2:06 - (First Question) – What do people need to think about when considering using machine learning tools
3:19 – Types of problems that AI is perfect for
6:09 – Walking through an actual test and understanding the terminology
11:52 – Data in training: training set, test set, validation set
13:55 – The difference between machine learning and classical academic finance modelling
16:09 – What will the future of investing look like using these technologies
19:53 – The concept of stationarity
21:31 – Why you shouldn’t take for granted label formation in tests
24:12 – Ability for a model to shrug
26:13 – Hyper parameter tuning
28:16 – Categories of types of models
30:49 – Idea of a nearest neighbor or K-Means Algorithm
34:48 – Trees as the ultimate utility player in this landscape
38:00 – Features and data sets as the driver of edge in Machine Learning
40:12 – Key considerations when working through time series
42:05 – Pitfalls he has seen when folks try to build predictive market investing models
44:36 – Getting started
46:29 – Looking back at his career, what are some of the frontier vs settled applications of machine learning he has implemented
49:49 – Does intereptability matter in all of this
52:31 – How gradient decent fits into this whole picture
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
(0:49) This week, to mark the two-year anniversary of the podcast, I offer a quick summary looking back and forward.
(0:55) Yesterday I heard about an Appalachian Trail thru hiker named Croatoan, or Crow for short. Crow was his trail name, which all A.T. thru hikers carry. Importantly, you can’t give yourself a trail name. Someone else has to name you along the way. Crow’s girlfriend was named Porridge. Another hiker he encountered along the way was named Bear Wrestler…more on him in a few minutes.
Crow was a Sobo, a south bound hiker heading from Maine to Georgia. This is a far more unique route, as most thru hikers are Nobos, hiking north. These hikers maintain a rich culture. Each wears their own trail flare, and has their own trail style. They are obsessed with their gear and food. They develop their own improved walking method to cover ground efficiently. Hikers typically won’t veer far off course, no more than a tenth of a mile, for almost any reason. Crow once left a meaningful gift he had received by a river bed, realized it two tenths of a mile later, and just kept moving. Two exception to this rule are to visit a brewery or find some homemade ice cream.
(1:50) There are different types of thru hikers. White blazers are hikers who follow the main trail, lit by the famous white blazes marking the way. Blue blazers often go a step further, exploring side trails in addition to the main trail. Green blazers smoke weed the whole time. There are other colorful ones I’ll stay away from here as they aren’t safe for work.
Apparently you can spot an imposter in a number of ways. My favorite was that anyone wearing big, sturdy hiking books should be questioned, because most thru hikers realize quickly that they are way too heavy and opt instead for lightweight shoes. Crow had a nice pair of Altras.
(2:22) This brings us back to Bear Wrestler. Around a campfire, Bear Wrestler was telling Crow and his girlfriend all about his long trail adventures and feats, but Crow noticed that Bear Wrestler was still chubby, carrying 40 pounds of fat. This is a second way to spot a potential imposter. When hiking intensely for months on end, it is impossible to keep any weight on, so Bear Wrestler was clearly a yellow blazer, a type of hiker who drives between trail heads instead of hiking the entire way like the purists.
As I heard about Crow and his adventure, I was thinking about what to say in this short episode about what I’ve learned across two years running this podcast. What I quickly realized is how many yellow blazers there are in the world, and that at many times in my life, I too have been a yellow blazer—opting for easier but less authentic, and less interesting, routes. The podcast is part of a portfolio of things that I’ve put in place in my life to try to avoid being a yellow blazer. To instead push myself to be more like a blue blazer, exploring anywhere I can.
(3:16) Looking back on the incredible guests I’ve had, I realize now the common mindset that unites them, and I’d like to highlight that mindset here. Even though my guests have come from just about every conceivable background, investing and otherwise, they are all in persistent and consistent pursuit of original experience. Now, that might sound obvious, but its rare to meet people whose default is to chase original experience. These people stand out quickly now to me, because I can recognize freshness in them, patterns I haven’t already seen 10 other times elsewhere. I now think often: am I doing this because its conventional, and/or because I’m watching what other people do? I think if you do the same exercise, you’ll be alarmed by how often the answer is “yes.”
Diving a bit deeper into these people and what unites so many of my past guests, there are four elements that I see over and over again.
(4:01) The first is common trait is deep curiosity. My take on curiosity after meeting all these people is that it works best in two ways: through building units of exploration, and through embracing strange intersections.
When people ask me what I do, I’ll sometimes just list the actual things I do, instead of a job title. So I say, I read books, papers, and articles. I run tests on data, using many of the same scripts and tools. I have tons of individual conversations with people in nooks and crannies of the investing world. I talk to clients and prospects. I write letters and white papers. These are my units of exploration, and I expect that I’ll keep repeating each of them forever. I have no clue where that might lead, but I’m confident that through curiosity fueled repetition, I’ll find good things. My close friend and most frequent podcast guest Brent Beshore has looked through 12,000 business deals. Talk about repetitions. I think curiosity, and the interesting investing opportunities it creates, is just a set of habits. Finding the right habits, the right units, is a great start.
I also often see what I call strange intersections. Picture a Venn diagram with tiny, but interesting, overlap. Some of the most intriguing things I’ve learned about live in these strange intersections. Ali Hamed and Savneet Singh, who are partners at a firm called CoVenture, have found interesting overlap between the worlds of lending, technology, and old world business. Whether it be shoe returns online or watermelons, they’ve found unique ways to lend at high rates on unique platforms enabled by technology. I often see people using seemingly unrelated interested, ideas, or strategies together to produce something different. I encourage everyone to think about strange ways of combining their areas of expertise and interest.
(5:40) The second common trait is persistence through randomness. Sometimes when I talk with people about the importance of curiosity, they say it sounds too easy and fun. The good news for the skeptics is that more often than not, its not fun, it is a total slog. When I looked back recently, I found that I only finish about 1 in 7 books that I start. Even most that I finish aren’t great. Put differently, I read an incredible amount of mediocre books to find just one book that makes a difference. This happens everywhere. The vast majority of data and ideas that we investigate at O’Shaughnessy Asset Management go nowhere at all.
I think most people will agree that the journey of discovery is often tedious, filled with dead ends, and above all random. My favorite example of this persistence through randomness was my conversation with Josh Wolfe, which I recommend in its entirety.
One of my favorite phrases picked up in the past two years is the Shangaan phrase Hi Ta Xi Uma, which I learned from Reinius Mflongo, one of the top trackers in Africa. It means “we will find it,” and Reinius will keep muttering it when he loses a track and struggles to find the next one. Everything is hard, and usually much harder than we can fathom. All the best people I’ve met through the podcast just don’t let that stop them. They also seem to develop an awareness of this constant difficulty and just become used to it.
(6:55) This second trait, persistence through randomness, is perhaps my favorite way to test for yellow blazers. There are many people in the world of business and investing who can talk extremely well. But if you keep peeling back the onion, asking more and more specific questions of a yellow blazer, you’ll find nothing original. But when you do hit on something, several layers down, that you’ve never heard before, that to me is a mark of persistent inquiry. That’s the kind of people I’m after.
(7:21) The third common trait is risk management. It is tempting to view uncertainty as a sort of risk, but I think that is a large mistake. All the good stuff is found in places that haven’t been mapped already. In fact, to take the idea of original experience a step further, what is common across the best people I’ve met is not just having the experiences, but then bringing some sort of order to the chaos they found in uncertainty. This isn’t risk, in my opinion. If anything, not seeking out chaos is what’s risky.
But then there are the conceivable risks: things that could go wrong that we can list ahead of time. On this front, guests were often very thoughtful: developing plans to be deployed when specific risk scenarios play out. I loved Mike Zapata’s story about the darkest night. He and his SEAL team would prepare and practice every tiny detail of a mission, creating plans for all risks, then wait to attack on the darkest night they could, because even though the conditions were hardest in the dark, their preparation and risk mitigation would shine in that difficult environment.
More specific to investing, many of my guests have a clear focus on downside risk protection. Several people have told me that there are common ways that things go wrong, but many more unknowable reasons things go right. So instead of trying to predict what will work, focus on avoiding the common pitfalls. My favorite example again came in Africa, being told 100 times to not run when lions charged us. It is a common and known risk factor (each of our guides had been charged more than 50 times), but one that was easily mitigated. If you don’t run, the lion will stop short and maul and eat you. You just have to have that lesson beat into your brain a hundred times ahead of time because the basic instinct, as is so often the case with investing, is to run.
(8:57) For the fourth common trait, we return to our thru hiker Crow one last time. I heard Crow’s story from my friend Bill, who picked up Crow hitchhiking to give him a quick ride into town. Bill offered to buy Crow dinner. He accepted with a huge smile, telling Bill “wow, that is some real trail magic right there.” Trail magic is my favorite piece of lingo in the thru hiking culture. Hikers tell endless stories about trail magic, which is what they call the acts of kindness and goodwill bestowed upon them by strangers along their journey. Food, shelter, a quick lift, a homemade cookie. Consider how incredibly positive sum trail magic is. The givers and the receivers of the magic both come out ahead. Despite all I’ve learned about business and investing over these two years, my favorite question to ask is still my final one in each episode, about acts of kindness. Getting to hear more than 100 stories of kindness from these people has been the highlight for me, and the best lesson.
(9:49) Summed up, what I’ve learned from these people is to follow your own way, always. Figure out the right units of exploration, embrace strange intersections, and carefully consider what could go wrong. Rest when you need it, be dogged and aggressive when the situation calls for it, but just keep going. Do it all with respect for others and as much trail magic as you can muster.
Thanks to all the great people I’ve had on the show, and thanks to you for listening for these two years, I promise to keep this discovery process going in some way, shape, or form forever.
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guest this week is Kathryn Minshew, the co-founder and CEO of the Muse, and the co-author of The New Rules for Work: the Modern Playbook for Navigating Your Career. I’ve learned in business is that the quality of people and the culture they create dictate outcomes. Having made plenty of mistakes hiring, and having had many enormous successes, I am always interested in best practices for finding and successfully recruiting the right people.
Given that Kathryn runs a jobs marketplace and has written a book on the topic, she is the perfect person to explore some the core concepts around pairing people with the right positions. We discuss how companies should market to prospective employees, how employees should represent themselves to employers, and the most common mistakes she sees across the hiring landscape.
Please enjoy our conversation.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:31 - (First Question) Largest changes in the nature of work and how people approach finding the right job for them
3:27 – Can this work be jammed into a formula
5:18 – What strategies is she sharing with employers when it comes to hiring
8:31 – How long should the process take
9:33 – Biggest mistakes employers make in this process
10:39 – Besides the usual stuff, what can perspective employees do to bolster their chances
12:50 – How much more efficient will matching technology get in the years to come
16:00 – What will be the largest changes to work itself
19:09 – Will we move away from full time work into parsels of work units
20:50 – Most successful piece of content or content strategy the Muse has employed
22:34 – Advice for early stage entrepreneurs
26:24 – Kindest thing anyone has done for Kathryn
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
I intentionally avoid the world of quantitative investing on this podcast. The whole point of this format is to learn about many different fields, and the vast majority of my time is already spent in quant world.
Occasionally I’ve broken this rule because of something unique, including this week’s conversation with Richard Craib, the founder and CEO of Numerai. If you listen to the podcast often you’ll have heard me reference Numerai, a hedge fund which blends quant investing, cryptocurrencies, crowdsourcing, and machine learning — talk about a PR company’s dream.
One important note: Numerai is both incredibly open and very secretive. You may sense a bit of frustration on my part, but that is only because, as a fellow quant who loves details about data and modeling, we couldn’t go deeper into the details on the record.
We discuss how Numerai has created an incentive structure to work with data scientists around the world in an attempt to build better investing models. The idea of having data scientists stake cryptocurrency in support of the quality of their models is fascinating. Like many hedge funds, Numerai doesn’t share its track record, so we don’t know if this works—but I hope you, like me, use this conversation as inspiration for how different technologies can intersect.
Hash Power is presented by Fidelity Investments
Please enjoy my conversation with Richard Craib.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
2:32 - (First Question) – How he came up with Numerai and how its related to his background
4:08 – How he works with and models the data for his system
5:24 – Describing machine learning as it relates to his work, and specifically linear regression
7:11 – The important stages in his sequence
8:46 – How the scale in the number of data scientists they use is different from other areas
11:30 – Which is the most important aspect of creating alpha; their data, algorithm work, proprietary ensembling of those algorithms.
14:30 – The idea of staking in blockchain
17:30 – Does the magnitude of the stake matter in blockchain
19:10 – Understanding the full incentive structure for both staked and unstaked work
21:07 – How is the prize pool determined
22:29 – Philosophy on how to source interesting data
26:11 – His thoughts on the crowd model and the wisdom of crowds
27:12 – The size of stakers for Numerai
27:51 – Interpreting the models and knowing when something is broken
30:03 – How they think about people not submitting their models
31:48 – Their model building
32:39 – Most interesting set of things they are working on to improve the overall process
35:38 – The Market for "Lemons": Quality Uncertainty and the Market Mechanism
37:11 – How people can come along with their own data
39:00 – His thoughts on the quantitative investment community
40:44 – What else is interesting him in the hedge fund world
44:03 – Building a marketplace and staving off competition
46:16 – Kindest thing anyone has done for him
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guest this week has a fascinating background. He has a PhD in biology but has split his time as both an investor and an operator. As an investor, he’s involved in companies like Airbnb, Coinbase, Instacart, Opendoor, Stripe, Square, and Pinterest—not too shabby. As an operator, he helped both Google and Twitter scale their businesses, in the case of Twitter from 100 employees to 1500 over two years. He’s just written a book about these experiences called the High Growth Handbook.
Our talk centered on what makes for a good investment and more specifically how Elad identifies an interesting market. Operators and early stage investors will find lots of nuggets in this fun conversation. Please enjoy.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:31 - (First Question) – Process for evaluating a young business
2:43 – Andy Rachleff Podcast Episode
3:09 – Data factors for evaluating a business
5:08 – Reference checks
6:42 – Advice for companies that are reliant on product cyclicality
7:01 – Where to Go After Product-Market Fit: An Interview with Marc Andreessen
7:31 – High Growth Handbook
9:30 - Lessons learned from marketing and growing companies
12:09 – How do you hire the best people to improve your distribution
13:16 – How does he think about lifetime customer value vs customer acquisition cost
15:57 – Should companies just focus on the high margin power users
16:35 – Best ways to organize a company hierarchy
19:16 – His interest and background in the area of longevity research
21:52 – Changes he has made in his own life as a result of this longevity research
22:56 – Most effective use of a CEO’s time
24:58 – How he evaluates or identifies interesting markets for potential businesses
28:03 – Any markets that fit his criteria that are underappreciated by investors
30:02 – Worst practices for businesses
32:19 – Kindest thing anyone has done for him
33:20 – What would be the topic of his next book
34:40 – Biggest lessons he’s learned about markets
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
For the 100th episode, I’ve brought back my good friend Brent Beshore. Brent was the 10th guest on the podcast, after we met because of a mutual interest in capital allocation. I quickly learned that Brent was one of the most unique and thoughtful investors around. He was an entrepreneur from the moment he left school, trying many different things before finding a fit buying smaller business with the intention of owning them forever.
What amazes me about Brent is his encyclopedic understanding of business and the nuances of different business models and deal structures. This comes from reps. He and his team have looked at about 12,000 deals over the years, at every kind of business that you could imagine. I’ve been with him when he goes through this process and it’s fun to hear what makes certain businesses stand out from others, which is largely the topic of this conversation.
You all know transparency is key for me, so it’s important to know that my family and I are investors in a fund called permanent equity, run by Brent and his firm Adventure.es.
To commemorate this milestone episode, I can think of no one better than Brent, because he exemplifies what has made this podcast so fun for me: learning from other people who are willing to share what they themselves have learned through fun, blood, sweat, and tears. Please enjoy our conversation, and thank you so much for coming along on this journey. I can’t tell you how much it means to me.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
2:02 - (First Question) – How does he think about optimizing risk in terms of the capital stack when looking at deals
5:27 – What conditions would they add debt down the road after investing in a company
6:52 – What business sectors are most intriguing for Morgan to invest in right now
6:57 – Trent Griffin Podcast
9:34 – Why no HVAC businesses if it’s such an attractive sector
13:56 – thoughts on rolling up similar businesses and horizontal scale
16:04 – Another industry Brent would focus on
18:02 – Difference between property management in larger cities vs smaller metro areas
18:51 – What role does profit margin play when Brent is evaluating a business
22:46 – The appeal of a hyper cyclical business
22:52 – Brent Beshore Podcast Episode
27:27 – Favorite counter cyclical business
28:14 – How they judge assets, tangible vs intangible assets
33:58 – How does he think about wage inflation when considering the cost of a business
37:21 – His fascination with pet crematoriums
38:57 – History of the permanent equity fund and the changes by having a larger pool of capital
43:48 – Pitching investors on a new structure for the business
46:14 – How will this business model scale
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
Today’s conversation is a continuation of my discussion on applying the lessons of tracking animals in the wild to tracking in your own life. I encourage to listen to that episode first.
In this second part, Boyd’s sister Bronwyn joins and offers perspective on business and life. Given that Boyd and Bron grew up in this wild place, their perspective on the world is refreshing and very different. We discuss a wide range of things, But the section on restoration near the end is just phenomenal stuff.
Please enjoy part two of my conversation with the Varty family.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:21 - (First Question) – Concept of shame and the role it plays in the lives of the people that visit
3:11 – Bron’s take on shame and if this is uniquely male issue
5:15 – How the Varty’s think about the concept of presence, and time with Nelson Mandela
13:34 – Selfishness as an impediment to presence
20:26 – Tending the cup
20:37 – Life is not a zero-sum game
23:15 – How they run the reserve as a business
30:18 – Importance of motivation as a business
33:55 – Cultivating a culture that makes a business a family
40:15 – How they help other family businesses
45:29 – The idea of restoration as a business and legacy
51:23 -Restoration model in investment
53:49 – The age of restoration will be born on the age of information
54:48 – Places that have given Varty’s deep connections (other than Africa)
1:00:46 – Kindest thing anyone has done for Bron
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
An interesting question that I think about a lot: how do you balance exploring the new with savoring what you already know and love? Most of the time I prefer to explore, but the best part of this podcast experience for me has been meeting people who become close friends. For episodes 99 and 100, I’m bringing back two of the most popular past guest who are both now dear friends.
This week’s episode is split into two parts, today and tomorrow. Today’s episode is with Boyd Varty and tomorrow is with both Boyd and his sister Bronwyn. The incredible Varty family hosted me in South Africa, so you’ll hear birds and elephants in the background as we talk.
This conversation with Boyd is about our shared experience called “track your life” which I couldn’t recommend more highly. We tracked animals on foot for five days, and learned a lot from the environment itself. While we discuss our time together, this is much more about how to live. My original conversation with Boyd had a huge impact on me, and this continues the exploration of Boyd’s idea that we should all be going our own way, in the right way, instead of simply following well trodden paths.
I hope you enjoy this conversation with Boyd and check back tomorrow for another conversation with the Vartys.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:55 - (First Question) – Encounter with five wild dogs
10:19 – The idea of a perfect day on the track
15:59 – The importance of silence
19:42 – Why we could all benefit from the power of silence
21:37 – Side effects of being on the track
23:49 – Following the smaller paths
25:20 – How culture can keep us from forging our own path
29:34 – The stress he puts on the watch at night
33:34 – The power of going from alert to rest and back again
35:11 – Why Zebras Don't Get Ulcers
38:25 – Disconnecting from the modern world and reconnecting with your life’s purpose
41:42 – How much does skill play into finding your life’s calling
43:23 – Common objections to what they do
49:58 – Importance of end of day on the track
52:33 – Silence and feeling of thousands of years of time passing through hallucinogenic
56:22 – His experience with bees
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag